Canada launches global trade complaint vs United States over use of duties — NewsAlert

12/01/2018

The U.S. Department of Commerce slapped an overall tariff of 6.53 per cent on about 25 Canadian plants, mostly in Quebec and Ontario, following an investigation that began in August 2017.

Another anti-dumping duty ruling will come in March from the U.S. Department of Commerce.

The decision dealt a blow to domestic newspaper industry giants who'd argued that countervailing duties against the paper importers could decimate their already hobbled industry. This is not only a print industry concern, but it could also ultimately affect other business segments in the US that rely on paper products.

Washington-based North Pacific Paper Co. said Canada was dumping newsprint into the American market with unfair subsidies at home.

Canada is the largest exporter of newsprint in the world, dominated by Resolute Forest Products, Kruger and Catalyst Paper Corp.

The complaint was filed last month but was released today, with some coincidental timing: the USA has just announced duties as high as nine per cent on Canadian paper. The tariffs are expected to take effect within one week.

"We've seen papers like La Presse move to full digital, and if the cost of newsprint goes up, it's one of those factors that's going to accelerate a move to digital", said John Hinds, CEO of News Media Canada.

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"NORPAC has a world-class facility that can compete with anyone around the world, but we need to be able to compete on a level playing field".

Neuheimer said about 5,000 jobs across Canada are directly linked to the newsprint business, and unlike softwood, where the industry had high prices to help offset the hurt of the USA duties, newsprint margins are already so low that the impact of this is going to be felt immediately. "The Department of Commerce will continue to evaluate and verify the accuracy of this preliminary determination while standing up for the American business and worker".

Norpac is targeting products such as newsprint, directory paper, bookgrade paper and groundwood printing and writing paper. The organizations warned that imposing tariffs on Canadian paper could result in the closure of many small newspapers.

In the longer term, however, Mason forecasts that the industry will face tough times due to dropping demand that will likely be sped along by higher prices for its customers, largely struggling USA newspaper publishers. It has asked the World Trade Organization to examine the American use of punitive duties, alleging that they violate worldwide law.

"We will continue to work with our forest industry, provinces and territories, and communities across Canada to defend this vital sector against unfair and unwarranted USA trade measures and practices".

The Commerce Department's decision isn't final. Other Canadian producers pay the weighted average of 20.23 per cent.

Resolute faces a preliminary duty of 4.42 per cent while the Catalyst Paper duty is 6.09 per cent, Kruger's is 9.93 per cent and the White Birch duty is 0.65 per cent.

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